The state of direct response video on Facebook

As more marketers look toward video ads on Facebook, columnist Andrew Waber takes a look at video adoption across the direct response ecosystem.

Facebook CEO Mark Zuckerberg sees “a world that is video-first, with video at the heart of all of our apps and services.” The results of this vision are easy to conceptualize on Facebook, just by the sheer amount of video content users share and interact with. However, when it comes to video advertising, there are notable differences in adoption based on strategic goals and by advertiser vertical.

For direct-response-focused marketers, some of the latest developments in this area emphasize how video ads on Facebook hold value and are at least worth testing, even for traditionally non-video-oriented advertisers. Additionally, creative best practices have evolved to address a broader array of companies and production values.

Understandably, a sizable portion of large-brand advertisers has a longstanding affinity for video content, as it naturally helps expand the reach of existing TV-style creative. More recently, many of these advertisers have also invested in more digital-specific video formats, like 360 or Canvas.

But direct response advertisers hold much more nuanced approaches in terms of tactics and strategy. The ability to drive revenue directly attributable to their activities necessitates constant testing, and provisioning budgets to creative and ad formats that test well against their KPIs.

It should come as little surprise then, that video adoption, while rising overall on Facebook, is not consistent across the direct response ecosystem, according to data I’ve analyzed as part of my work at Nanigans.

Over the past year, the share of Facebook ad spending going to video formats rose 57 percent across all advertisers using Nanigans software, the vast majority of whom have direct response goals. While adoption of the format broadened in 2016, much of the actual spending growth came from gaming advertisers. Between January and November 2016, a full 48 percent of all gaming advertiser spend on Facebook went to video ads, a dramatic increase from the 21 percent share observed over the same period in 2015.

Looking beyond the vertical-oriented view of video, what has become clear is that when video works for advertisers, they don’t shy away from investing in the format. Sixty-five percent of all Nanigans advertisers that spent on video ads in the first 11 months of 2015 increased their video budgets during the same period in 2016.

Shorter-term trends underscore this growth as well, with average Facebook video ad budgets increasing 63 percent between May and November 2016.

Particularly over the past year, video has tended to attract the most investment from advertisers working towards app install or re-engagement goals. A number of lead-focused and more traditionally focused e-commerce marketers spend on video in a more limited fashion, but carousel and dynamic ads are more prevalent for these advertisers as a whole.

Video making gains on Facebook Audience Network

One of the topics I’ve touched on within a few pastcolumns was the growth of Facebook’s Audience Network. Specifically, that Facebook has repeatedly invested in both expanding the amount of Audience Network inventory and the ability of associated publishers to show a broader array of ad types.

While we’ve previously researched how enabling Audience Network has the potential to deliver greater reach and higher ROI for Facebook advertisers, video is also now playing a growing role.

As always, Facebook uses Audience Network to deliver ads to non-Facebook apps and websites only when performance is expected to match or beat the Facebook-native placement. 2016 saw an increasing share of video ads being delivered outside of Facebook — again reflecting the importance of video to Facebook’s overall strategy.

Among advertisers that enabled Audience Network for video ads, close to five percent of spend was directed toward off-Facebook inventory in November 2016. This share was less than one percent just six months prior in May 2016, across the same set of advertisers.

The old adage says, “You don’t know unless you try.” So, as a direct response advertiser, regardless of your overarching campaign objectives, you should exercise due diligence in testing out a variety of formats against your target audience. This is already happening on Instagram, with 40 percent of Nanigans advertisers allocating a portion of their spend to video ads.

For app-focused advertisers, video is an especially worthwhile avenue worth testing, and one that can be easily explored using video of actual in-app activity. For advertisers with other goals, check out these tips for cost-effectively creating video assets before starting your test.

Opinions expressed in this article are those of the guest author and not necessarily Marketing Land. Staff authors are listed here.

About The Author

Andrew Waber is the Manager of Data Insights and Media Relations at product experience management (PXM) platform provider Salsify. In his current role, Andrew manages the analysis, editorial direction, and strategy for Salsify's public facing reporting on the online retail marketplace. Prior to his time at Salsify, Andrew served as the Manager of Market Insights and Media Relations for advertising automation software provider Nanigans, and as the Market Analyst and lead author of reports for Chitika Insights, the research arm of the Chitika online ad network. Andrew's commentary on online trends has been quoted by the New York Times, Re/Code, and The Guardian, among other outlets.